Tax break ordinances slow to spur job creation

Voters had hoped to create jobs by approving property tax breaks for businesses last year, but the programs haven't yet paid off in Hillsborough County and a few other cities and counties.

Seven months after the fall elections, no companies have yet tapped into the tax-break programs to expand in Hillsborough, Charlotte and Martin counties. Sarasota County is an exception and has had some success.

Despite the slow start, other cities and counties are eyeing to offer their own versions of tax breaks for businesses, including Pinellas County.

Local governments originally hoped the tax breaks would give them an advantage over other locations in luring businesses and helping existing ones grow. But, so many cities and counties have jumped on the idea that others feel forced to give them, too.

"Whatever competitive advantage the early movers have is short-lived," said Mark Huey, the outgoing economic development administrator for Tampa, where voters approved a business tax-exemption program in March.

Tampa Bay-area city councilmen, county commissioners and candidates ran on promises of creating jobs, and several put tax exemption programs before voters last summer and fall.

Cities and counties in Florida have had the right to grant businesses property tax breaks for 30 years and many have, especially Florida Panhandle governments that compete against Georgia and Alabama for jobs.

But no Bay-area counties or cities offered them as of 2010, according to a Florida House of Representatives analysis of tax exemptions.

That changed last year when voters in Hillsborough, Charlotte and Sarasota counties and in Martin County on the East Coast approved offering businesses property tax exemptions of 50 to 100 percent for creating jobs. Plant City and Tampa voters also passed similar programs.

Polk County voters rejected the idea, though.

In Hillsborough County, new or existing companies that promise to create at least 10 jobs at higher-than-average wages could knock 50 percent off their county property tax bill for five years. Non-manufacturing businesses could get the same tax break if they created 50 jobs in an office setting.

The more jobs a company promises, the bigger and longer-lasting its tax break.

Hillsborough County leaders left the door open for "destination retailers" to get the tax break, even though the focus was on luring high-paying biomedical, financial services and manufacturing companies.

County leaders have been talking to Bass Pro Shops, a giant outdoors store, about economic incentives including the new tax exemption program.

So far, though, no companies have tapped into the programs to expand in most cities and counties that passed them. Economic development leaders say that's simply because companies aren't expanding.

Hillsborough County voters passed the exemption program in November, but it only really went into effect in February. Since then, an industrial company called Chromalloy applied for a tax exemption in February that would've given it a six-figure tax break over five years, said Bruce Register of the Hillsborough County Economic Development Department.

Chromalloy withdrew its application because of timing issues, Register said. The Hillsborough County Commission has to pass a separate ordinance for each company that wants the tax exemption, and Chromalloy didn't have time to wait for the process to play out, he said.

Register said things should pick up when the economy improves.

"Incentives have a role, but they don't necessarily drive the decision in and of themselves," he said.

Voters in Charlotte and Martin counties passed the tax exemption program last August, but those communities are still awaiting their first chance to use it. Tampa voters just approved the program in March.

Following in Hillsborough's footsteps, Pinellas County may create a tax-exemption program and take it to voters there next year, said Mike Meidel, that county's economic development chief.

Sarasota County appears to have had the most success deploying it. That county gave three manufacturing companies a 100-percent exemption on their property taxes for 10 years, and gave a fourth company a 70-percent exemption. Those businesses promised to create 777 jobs in return, said Joan McGill of the Economic Development Corp. of Sarasota County.

In St. Petersburg, voters may get to vote on property tax exemptions for businesses this fall, said Dave Goodwin, that city's economic development chief. He acknowledges that St. Petersburg officials feel pressure to pass tax breaks to keep up with Tampa and Hillsborough County.

"There's a very strong feeling here that we need to do it," Goodwin said.